Medical practice revenues down in 2008, MGMA says

Last year, revenue for medical practices fell, marking the first time in several years the industry has seen such a decline, according to new research by the Medical Group Management Association. While groups responded by cutting costs, they weren't able to do so enough to offset the revenue drop completely.

The study, "MGMA Cost Survey: 2009 Reports Based on 2008 Data," concluded that multispecialty group practices' total medical revenue fell in 2008. One major contributor to the drop was the ongoing fall in patient volume, which dropped 11.3 percent from 2006 to 2008. Practices also saw a 9.9 percent drop in the number of procedures they performed. At the same time, bad debt for multispecialty group practices' fee-for-service changes grew 13 percent from 2006 to 2008.

Unfortunately for the practices, costs have been climbing dramatically, despite flattening revenue. Total operating costs for multispecialty group practices have climbed 45 percent over the past 10 years, while total medical revenue has climbed only 46 percent. Cost increases have been driven by many factors, including the cost of support staff, professional liability costs and drug supply expenses.

To get more data from this study:
- read this MGMA press release [1]

Related Articles:
MGMA: Finances, EMR top 2009 challenges for practices [2]
Medical group-practice cost increases outpace revenues [3]
MGMA: Practice costs rising faster than revenue [4]